Mark Mobius says investors turning their gaze from US to emerging markets

Manila: After the longest stretch of quarterly gains in US equities since 2015, investors are looking toward emerging markets as they seek fresh opportunities, says Mark Mobius.

“The performance of US equities has been very good and now people are starting to think it’s time to diversify and they have been underweight emerging markets,” Mobius, executive chairman at Templeton Emerging Markets Group, said in an 30 August interview in Manila.

The S&P 500 Index has rallied 28% since end September 2015, beating the MSCI All World Index. However US equity funds had $2.6 billion in outflows in the week of 23 August, while emerging markets attracted about $200 million, Bank of America Merrill Lynch reported last week, citing EPFR Global data.

Emerging markets will outperform developed market equities on faster economic growth, rising incomes and cheaper valuations, Mobius said. “This outperformance can run about five years once you have momentum.” Bloomberg